Earlier this week, we were discussing the issue of cannabis stocks and how a potential shift from Schedule I to Schedule III might be just the thing to help the industry and allow banks to conduct business with cannabis companies. Now, analysts are reconsidering the notion, and politicians are making other moves to fix problems. That’s sent several cannabis stocks upward to varying degrees in Friday afternoon’s trading.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The first unexpected development came from Bernstein analysts, who noted that a move from Schedule I to Schedule III for cannabis wasn’t the best approach as far as both investors and producers were concerned. That might be a head-scratcher on the surface, but there’s a reasonable supporting argument behind it. A move to Schedule I might make cannabis seem more like a medical product, especially since part of the definition of Schedule I products involves their potential for addictiveness. That would make them seem less like a consumer product as well and could destroy an entire line of business.
Meanwhile, cannabis producers are getting help from Congress, as Sen. Charles Schumer penned a “Dear Colleague” letter, calling on the rest of Congress to establish some new laws that would take banks off the target line for offering banking services to cannabis producers. Moreover, to do so quickly, as Schumer wants to see the issue settled by the end of this year. As noted, several cannabis stocks benefited from the move, including Cresco Labs (OTHEROTC:CRLBF), Curaleaf Holdings (OTHEROTC:CURLF), MedMen Enterprises (OTHEROTC:MMNFF) and Tilray (NASDAQ:TLRY). However, Trulieve Cannabis (OTHEROTC:TCNNF) posted a fractional loss in Friday afternoon’s trading.
Overall, analysts expect the least from TLRY stock, as they see 17.53% downside risk based on its average price target of $2.47. Meanwhile, Wall Street anticipates 117.37% upside potential from Cresco Labs thanks to its average price target of $3.63.
